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U.S. Solar Industry Stays Strong Despite Tariffs on Imported Panels

U.S. Solar Industry Stays Strong Despite Tariffs on Imported Panels

The announcement of new 30% tariffs on imported solar panels in January, one of the early salvos in a trade war between the U.S. and China that has dominated headlines for the past year, put the solar industry on edge. Many solar professionals feared that our livelihoods, as well as the rapid momentum that solar power had gained over the past decade, would be jeopardized.

As we wrote at the time, panel tariffs would have an economic chilling effect on one of the U.S.’ most promising industries, which has been a force for new job creation and a major contributor to the national economy. GTM Research wrote that these tariffs “could devastate the U.S. industry, wiping out two-thirds of solar systems forecast to be installed over the next five years.” The experts weren’t wrong - tariffs did delay or destroy a significant amount of solar projects in 2018, setting back clean energy goals and reducing the solar industry’s ability to contribute to economic growth.

However, due to the strength of the solar industry and continually growing consumer support for clean energy adoption, the tariffs have not been as devastating as many predicted. Let’s take a look at why:

Solar Panel Prices Continue to Trend Downward

Solar tariffs negatively impacted many utility-scale solar projects in 2018 and caused a contraction in the solar market overall, but despite additional fees, solar panel prices are now lower than ever. How? Several unforeseen (and unpredictable) circumstances have worked in the industry’s favor.

As Quartz reports, “Federal tax credits, state renewable energy goals, and plunging prices for equipment from China have driven healthy demand despite the import duties,” leading to optimism and momentum for the solar market in 2019. In late May, Chinese authorities announced they were “removing domestic feed-in tariffs (favorable long-term contracts for renewable energy producers) and moving utility-scale solar to competitive bidding.” As a result of this competition between rival manufacturers, PV panel prices dropped to their lowest level ever.

This was great news for solar professionals and consumers, as it had a leveling effect on the price increase imposed through trade tariffs. If the tariffs had not gone into effect, however, consumers would see even lower prices today and the solar industry would have been spared a lot of panic and delayed or canceled projects.

Panel Options Continue to Increase

Another mitigating factor for solar consumers has been the continually expanding options they have when implementing solar collection and storage technology. Many new products, including building-integrated photovoltaic (BIPV) panels, have taken the market by storm over the past year, increasing the design and functionality options for commercial and residential solar adopters. American-made solar panel options are increasing as well, although the tariffs did not achieve their stated goal of leveling competition between foreign and domestic photovoltaic producers.

Consumers Want More Solar Power

Perhaps the greatest strength of the solar industry, and the primary reason it has weathered these tariffs as well as it has, is the growing consumer demand for solar power. Corporate adoption of solar power shows no signs of slowing, and although residential consumers were spooked by potentially higher prices related to the tariffs, the cultural consensus is firmly in favor of renewable energy growth. Despite the obstacles of the past year, the solar industry continues to win over the hearts and minds of Americans who understand how important alternative energy sources are to the future of our economy and our climate.

We aren’t out of the woods yet, however. Recently, the Wall Street Journal reported that nearly half the economists they polled consider the ongoing trade war between the US and China “the biggest threat to the U.S. economy in 2019.” Despite this threat, the solar industry has remained strong and anticipates further growth.

Solar Design Studio remains committed to providing solar solutions with the greatest possible return on investment for our clients. If you’re ready to start a solar project of your own, contact us today to learn more.

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What Our Clients Are Saying

I have researched adding PV to my home for several years and have met with several PV providers in the KC area and they tend to fall into two broad categories, the new and low budget operators who got into this to ride the wave and are not that knowledgeable, and the commercial providers who have little interest in working with a homeowner and are geared to providing a much larger system where some economy of scale must come into play. Both my wife and I are architects and we wanted something different and it was challenging to find someone who was interested in doing something out of the ordinary. Neither or those types were interested in working with us as we were trying to create something a bit different. they each wanted to sell us their pre-configured solutions.

 

Fortunately we found Bob Solger. He has been a delight to work with and is incredibly knowledgeable and responsive. We wanted to create a solar carport that would provide cover and protection for our cars, but would also provide shade over part of our patio. In essence, the big idea was to create an outdoor pavilion, when, if we wanted to entertain we could move the cars out of the way and have a large covered area for an outdoor gathering. We had selected the Lumos brand of solar panels as they have a very clean look and are partially transparent so some light filters through the panels creating a mottled light pattern on the ground, similar to the shading from a tree. In addition, the system is set up to hide the majority of the connecting wires in the support beams so when you look up at the underside of the PV roof you see a very clean look. Bob recognized our goal and worked with us to ensure the project’s success. Bob identified a structural engineer to design an elegant support structure and found a fabricator to build it affordably. Finally he connected us with a contracting team to clear the space, provide the footings, retaining walls, and pad, who were every bit as careful with everything as you would hope. They were amazingly accommodating to every request and understood that there were a lot of competing challenges that needed to be resolved so we could fit this all in to a very tight location and make it look like it belongs.

 

The bottom line is that it all turned out better than we could have hoped and while it did cost more than the low ball bids received from some of the low budget operators, it was less than the commercially focused suppliers, and more importantly we got the design we wanted and a well-constructed PV carport that will give us great delight for years to come. The best part is of course the savings on our electric bill, which thus far has been averaging around $200/month. So not only do we have a new carport and entertainment patio that our neighbors have been stopping by and admiring (which given that we live in the older Brookside neighborhood and our PV carport is quite modern, we were much relieved) but, our electric bills have been in the under $10/month range.

 

We owe a great debt of gratitude to Bob and his knowledge and team for helping to create an amazing PV carport for us. I’m sure you would be delighted with whatever you engage him to help you with.

Dev & Sue Malik

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